NEW YORK (
shares tanked on Thursday after the company announced the resignation of Mitch Lowe, the president of its red box automated DVD rental unit.
The Bellevue, Wash.-based company also updated its outlook, saying it expects second-quarter earnings from continuing operations of 96 cents to $1 a share on revenue ranging from $434 million to $436 million. The current average estimate of analysts polled by
is for a profit of 81 cents a share in the June period on revenue of $445.9 million.
The stock was last quoted at $53.40, down 9%, on volume of nearly 650,000, according to
. Based on a regular session close at $58.63, the shares were up 4.7% so far in 2011.
Coinstar said Lowe is leaving to "pursue entrepreneurial and other interests" but he will stay with red box until a successor is named. The company is conducting an external search for Lowe's replacement.
For the full year, Coinstar now sees earnings from continuing operations of $2.90 to $3.15 a share on revenue of between $1.76 billion to $1.85 billion. The average analysts' estimate is for a profit of $3.02 a share in fiscal 2011 on revenue of $1.81 billion. The company is expecting big things in the fourth quarter, however.
"Given the release schedule for the second half of 2011 and rollout of video game rentals, the company now expects fourth quarter 2011 revenue to be greater than any of the previous three quarters," Coinstar said. "GAAP EPS from continuing operations on a fully diluted basis is now expected to be higher in the third quarter than in the fourth quarter of 2011, due to a greater percentage of new titles in the fourth quarter being released by studios that generate lower margins for the company."
Wall Street was bullish on Coinstar ahead of the report with 12 of the 18 analysts covering the stock at either strong buy (5) or buy (7), and the median 12-month price target sitting at $64.
Written by Michael Baron in New York.
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